An insolvency expert is warning that loopholes in draft legislation overseeing the industry mean almost anyone can become an insolvency practitioner.
At present, anyone can manage the affairs of a company's collapse, as long as they're over 18 and not mentally incapacitated.
The Insolvency Practitioners Bill is being amended to become more of a code of conduct for the industry, but KPMG's head of restructuring and insolvency, Shaun Adams, wants to see the industry more highly regulated.
Mr Adams says it is possible that a number of rogue practitioners will be debarred under the proposed legislation, but it wouild would still not regulate new people coming into the industry, letting in people without training or expertise.
He says the bill needs to include more elements in the fit and proper test, to make sure those acting as insolvency experts are qualified to do so, and are acting in the best interest of creditors.
The bill should also have strict controls when overseas-based insolvency practitioners take on work here, as creditors' best interests could easily be jeopardised, he says.
The bill includes a condition that the way insolvency practitioners are registered be reviewed in four years time, allowing information to be collected on how much a problem rogue operators are.
